FX Flows

From the FXWW Chatroom – During the early hours on Monday, EurUsd traded down to 1.0989 from 1.1018. Some said the move was linked to trigger of stops surrounding 1.0995. Buying from option occurred and brought EurUsd back to square one. Offers are lined up above 1.1030 and thickens into 1.1070’s. 

Japanese were better sellers of UsdJpy this morning bringing the pair from 121.35 to 121.09. Some linked the sales to exporters but I was told retail side was taking profit as well. If you recall, few weeks ago I said these retailers “Mrs Watanabe’s” – they were long in the 118’s; makes good sense to take money off the table. 200-day SMA sits at 120.99, we should see some interests there. Keep a note, there is a very large UsdJpy strike at 120.00, which expires on Oct 29, notional near $5bn. 

Both AudUsd and NzdUsd advance in low volume. Aussie is still locked within 0.7200-0.7300; bids are linked to exporters while sellers are global macro. Spreads of yield between Aussie bonds and UST have narrowed. Rates pointing AudUsd to 0.7185. 

Oil price and UST futures were steady during Asia, Aud and Nzd firmer, thus UsdCad backed away from 1.3184. We see better offers than bids – selling from real money account close to 1.32-handle and light bids unless we get to 1.29-handle. Rates space still pointing lower UsdCad, 1.2685. 

Asians 
Post-PBOC rate cut and smiley faces on Asian equities. Those who jumped into getting long Usd/Asia were seen taking money off the table. This should not be a surprise. Since Friday’s Chinese move, economists and editorials are betting against Fed move in Dec. 

In Korean Won, Kospi slight positive – we encountered few prop/macro selling 1’s UsdKrw above 1136.0. 

UsdSgd ran into resistance ahead of 1.40-handle. Like rest of Usd/Asia, UsdSgd drifted towards 1.3950’s where we hear reports of momentum funds picking up Usd. 

Thai Sept customs trade surplus advanced to $2.79bn versus August’s $721mio. This was due to large fall in imports -26.2% from -4.8%. Not surprising given the weak Thb. 

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